When Apple, Samsung, or Google announce a new smartphone, it’s big news. The latest iPhone, Pixel or Galaxy phones are status symbols in their own right. Although there are more manufacturers, these are among the most popular in the US.
Not too long ago, companies like Nokia, LG, Blackberry, and Motorola produced phones that sold pretty well. Some became the best-selling phones of all time. Remember the Motorola Razr? Kim had one in hot pink! Tap or click here to see 10 of the most iconic phones we miss.
I recently bought a new phone, but even before that, I realized that I had made a huge mistake with the last one. Read on so you don’t make this costly mistake.
Here’s the backstory
In late 2019 I replaced my iPhone X. It was a great phone, but it was ready for an upgrade. I wanted an iPhone 11 Pro Max with 512GB of storage, the latest and greatest from Apple.
The salesperson asked me if I would consider renting the phone. He said he could pay a low monthly rate, which would stay about the same if I upgraded to a new phone the following year.
It seemed like a good idea! I signed a lease and kept my old iPhone X to give to a friend.
We all know what happened in 2020. The pandemic hit and there was too much going on for me to bother with buying a new phone. In 2021, I moved out of my apartment, which delayed things even more.
When Apple announced the iPhone 14 at its Far Out event this year, I watched it live while covering the story for Komando.com. I was so excited about the phone’s new features that I ordered the 14 Pro Max with 1TB of memory from Apple’s website a few days later. And I paid full price up front to own it.
Why didn’t I consider a lease? Well, I did the math to figure out how much I had paid for my 11 Pro Max from the day I got it to the present. And wow, my monthly payments totaled more than the original $1,099 price I would have paid to buy it outright.
When my new 14 Pro Max arrived, I took it to T-Mobile so I could trade in my old phone. If I had bought my iPhone 11 Pro Max, I could have kept it or traded it for some money. Instead, the store returned it with nothing to show for it.
When leasing makes sense
Of the three major carriers, T-Mobile is the only one that still offers a leasing option. Sprint, now T-Mobile in all but name, had its leasing program called Flex Lease, which T-Mobile canceled last year.
Verizon does not offer a leasing program, nor does AT&T. However, they do offer flexible payment plans with upgrade options. You can trade in your phone for a new one before you finish paying for it. But if you make all the payments, the phone is yours.
If you plan to upgrade to the newest model every year, leasing may be right for you. You’ll have lower monthly payments than you’d pay to buy a phone, and you can upgrade later on similar terms. There are several factors here, such as which phone you lease and which one you upgrade when the lease ends.
For people with low credit scores, leasing can offer the opportunity to get a phone that they might not otherwise be able to buy.
Let’s use a real world example to find out how this can work for you.
from T-Mobile JUMP! On demand Leasing plan offers iPhone 12 with 64GB of memory for $75 down plus $26.84 for an 18-month lease. That comes to a total of $558.12. The phone’s list price is $699, saving you about $141. At the end of the lease, you can pay an outright purchase fee to keep the phone or return it and upgrade to a new one.
You don’t have to wait 18 months to get a new phone. You can bring your leased device to a T-Mobile store and trade it in up to once a month. That sounds like more trouble than it’s worth, but you have the choice.
Why leasing is a bad idea
When you trade in your old phone, estimate the full cost of leasing the new phone, even if you don’t plan to keep it for the full 18 months. If the total cost is less than the list price, you still win.
But it’s not a huge savings, and you’ll never get that phone unless you pay a purchase fee in addition to your lease payments.
When you buy a phone outright, you can more easily switch carriers if you want. You are not required to pay for a phone every month. If you want a new phone, you can trade yours in for some credit towards a new phone or give it to a friend or family member who can use it.
Since T-Mobile is the only major carrier still offering leases, most people won’t have this option. And if you want to lease one through Jump! plan on demand, your phone options are minimal.
But if I could go back in time, I would have bought my iPhone 11 Pro Max instead of renting it. I could have received almost $300 for my new iPhone 14 Pro Max, according to this helpful site. Tap or click here to see how much your phone is worth.
Don’t make the same mistake I did.